Tax Justice Network ■ 2022: developments, successes and looking forward to 2023


As 2022 comes to an end, we would like share our reflections on the Tax Justice highlights of 2022 – a year of shifting power dynamics and increasing momentum. We’ll begin with our CEO Alex Cobham:

Organisationally, this has been a key year with the first major refresh of the board for some years. This high level, globally diverse group is now helping to steer the development of our new strategic framework, and have already contributed in significant areas of our international advocacy and partnership.

A significant milestone for our internationally dispersed team was the first in-person retreat since before the pandemic, reinvigorating relationships and energising us all. The retreat also allowed us to engage with important strategic discussions of the sort that virtual interactions, however well managed, simply cannot provide.  

In our global advocacy, we have seen dramatic progress in the fruits of a long-term commitment made by the Tax Justice Network and our allies at the Global Alliance for Tax Justice. At a key strategic gathering hosted by Friedrich Ebert Stiftung in Berlin, in 2017, the two organisations committed to jointly prioritise the creation of a globally inclusive intergovernmental tax framework under UN auspices. Such an aspiration is included in foundational policy documents such as ‘Tax Us If You Can’ (2005), but had not been actively pursued to the same extent as other key elements. With multi-year core funding (from the Ford Foundation in particular), it was possible to make such a long-term commitment to what many – even sympathisers within the broader movement – had thought to be an impossible aim, because of the committed blocking of G77 attempts by OECD member countries. Impossible no more!

This year saw a major breakthrough achieved. After momentum building through a range of UN and other processes, including the High Level FACTI Panel report in 2021, the pivotal leadership came from the May 2022 declaration of African finance ministers at the Economic Commission for Africa summit. This underpinned Nigeria’s shepherding of an Africa Group resolution through the General Assembly, with the result that the Secretary-General has been mandated to produce a report on the options; intergovernmental discussions have been given the go-ahead to start next year; and the 78th General Assembly will debate the issue and consider the formal commencement of negotiations.

International tax abuse costs the world – in our conservative estimates – US$483 billion, the best part of half a trillion dollars in lost revenues each year. While OECD countries lose the majority of that sum, it is lower-income countries that lose the greatest share of their tax revenues – and for whom that translates most directly into foregone public services upon which people crucially depend. But the OECD has failed to deliver tax reforms that are effective even for its members; and failed to allow meaningful representation for non-members. And as we wrote in an open letter to the G20, the OECD has also failed in its stewardship of a key global public good, in the form of data that is critical for countries to understand and combat tax abuse.

It is no surprise, in this context, that the Africa Group resolution was adopted by unanimous consensus. Some OECD members have signalled they may still be obstructive in the discussions to come, but everyone – including their own citizens – knows full well that the answer lies in a genuinely global process, under UN auspices. You can read more about the resolution here and listen to our podcast here, which breaks down and analyses the power plays in that historic meeting.

In 2023, we will work with allies around the world to support governments in preparing national and regional positions for the intergovernmental discussions, and in holding governments to account to ensure that they take progressive, open perspectives with a focus on curbing tax abuse – not protecting the anachronistic power structure of the OECD.

Tax Justice and Human Rights – Liz Nelson

Austerity has followed quickly on the heels of the pandemic and the related dual crises of inequalities and climate have sharpened our work on human rights. Across all our work human rights resonate.  Whether in forging partnerships in advocacy, developing policy solutions, building upon jurisprudence or collaborating on research, overlapping inequalities and human rights failures are our concern. The links to tax justice provide the critical narrative that have guided our successes over the last twelve months and will continue in our new work.

In March 2022 we made a joint submission to the United Nations Human Rights Council Universal Periodic Review (Fourth Cycle). Our focus was the United Kingdom of Great Britain & Northern Ireland (UK & NI) and the issues raised centred on the UK & NI’s poor record on implementation on financial transparency, including in its crown dependencies and oversea territories. Working in collaboration with the Government Revenue and Development Estimation tool (GRADE) at St. Andrews University and our data on tax abuse (2021) we were able to highlight the human rights impact of cross border tax abuse illustrating that  the additional revenue lost to tax abuse “would be associated with 36 million people accessing their right to basic sanitation, 18 million accessing their rights to basic drinking water, and almost 7 million children attending school for an extra year. Additionally, this increased access to rights would be associated with over 600,000 children and nearly 80,000 mothers surviving over ten years.

In November we presented, to the UN CEDAW Committee (Convention on the Elimination of All Forms of Discrimination against Women) a follow up report to our collaboration in 2016 on the impact of financial secrecy and cross border tax abuse facilitated by Switzerland. The Committee recognised the continued failure to address the  financial secrecy that keeps Switzerland ranked number 2 at the top of our Financial Secrecy Index.

Our advocacy and research strengthened a valuable collaboration with the Tax Ed Alliance. The Alliance which has a three target country focus and multiple national, regional and international partners, analyses the impact of tax abuse on the right to education. Our research has supported advocacy and provided graphic illustrations, including for the Heads of State Transforming Education Summit, on the how the financing of free public education is negatively impacted by tax abuse.

Our Future is Public (#OFiP22) Conference in November gathered social movements and civil society organisations from all over the world in Santiago, Chile for a 4-day Conference. We contributed to discussions across many sectoral sessions and plenaries aimed at developing strategies and narratives to strengthen public services for the realisation of economic, social and cultural rights and tackle the effects of climate change.(see link here to read the Santiago Declaration).

We continue to work in research collaborations with Government Revenue and Development Estimation tool (GRADE) at St. Andrews University, exploring and illustrating the pervasive impact of tax abuse on rights to health, education and on climate justice.

In September we began our work as a contributing partner to the Demo Trans Research Consortium. Over the next three years will be working with researchers from the universities of Leuven, Charles (Prague), Bergen and Utrecht. The research will explore the interactions between governments and corporations and their impact accountability and on human rights. Demo Trans is funded by the European Commission in its Horizon Europe Framework.

In 2022 we have been successful in attracting funding to bolster our human rights evidence building, and have secured additional funding to explore how tax justice can provide policy solutions for the dual crisises of inequalities and climate justice through an international perspective.

Beneficial Ownership – Andres Knobel

The State of Play of Beneficial Ownership Registration report, based on the Financial Secrecy Index edition published in 2022 shows that almost 100 jurisdictions already have laws establishing beneficial ownership registration, where companies, trusts or other types of legal vehicles must file information to a government authority on their beneficial owners (the natural persons who ultimately own or control them). Mainstream implementation of beneficial ownership registries will also be promoted by the 2022 Reform of the Financial Action Task Force (FATF) Recommendation 24 on beneficial ownership of legal persons in relation to the fight against money laundering and the financing of terrorism.

While beneficial ownership registration has been improved and expanded, the Reform of Recommendation 24 fell short of requiring public access to beneficial ownership information. 

An even harsher blow to public access was struck on 22 November 2022 by the EU Court of Justice which invalidated public access to beneficial ownership information in a ruling that caused outrage in the financial transparency movement. While the Court clarified that the media and civil society organisations involved in the fight against money laundering have a legitimate interest to access beneficial ownership information, implementing this type of access has already created many challenges and some EU countries have already closed access, affecting calls and improvements for public access in non-EU countries, including many British Overseas territories. On the bright side, the ruling has woken up civil society actors and regroupings and strategising have already begun to counter the ruling’s effects.

Secrecy – Moran Harari

Financial Secrecy Index: Global financial secrecy has shrunk:

In May, we published the 2022 edition of the Financial Secrecy Index. The results show that the supply of financial secrecy services, like those utilised by Russian oligarchs, tax evaders and corrupt politicians, has continued to decrease globally due to various transparency reforms. However, five G7 countries alone – the US, UK, Japan, Germany and Italy – were responsible for cutting global progress against financial secrecy by more than half. When excluding the increases in financial secrecy from these five countries, the Financial Secrecy Index 2022 finds that global financial secrecy was reduced by 5 per cent.

Public Country by Country reporting: 

In October 2022, Australian government showed global leadership in its announcement on a new requirement for multinational corporations to publicly disclose their country by country reporting, a type of reporting method designed to expose and deter multinational corporations from shifting their profits to tax havens. The new requirement was part of Australia’s federal budget for 2022-2023 and the legislation is expected to be implemented by 1st July 2023. The Australian initiative appears to be far broader than the recent EU directive on public country by country reporting -which requires multinationals to publicly report on on activities that multinationals have in Member States as well as in jurisdictions included in the EU list of non-cooperative jurisdictions.

Automatic Information Exchange:

In light of the rapid growth of the Crypto-Asset market, and following a public consultation meeting on 23 May 2022, in which our Andres Knobel participated, the OECD published in October 2022, the Crypto-Asset Reporting Framework (CARF), which constitutes a further improvement to the automatic exchange of information set out by the Common Reporting Standard (CRS). The Crypto-Asset Reporting Framework will require jurisdictions to report on tax information on transactions in Crypto-Assets, with a view to automatically exchanging such information with the jurisdictions of residence of taxpayers on an annual basis. In light of the Crypto-Asset Reporting Framework, the OECD has also made changes to the Common Reporting Standard for it to cover also indirect investments in Crypto-Assets through derivatives and investment vehicles.

Data – Miroslav Palansky

During 2022, the Tax Justice Network made a lot of progress in the area of data collection and infrastructure. The first half of 2022 was dominated by work on the Financial Secrecy Index 2022, which was released in May. The index provides a treasure trove of detailed information on financial secrecy offered by 141 jurisdictions around the world, which is unprecedented in terms of both scope and coverage. All the underlying data is available on the revamped website of the Financial Secrecy Index.

Throughout the year, we have been working on developing a new data portal, which will allow researchers, journalists, or anyone else interested in tax justice to explore, download, and use data collected by us, as well as other relevant variables from various sources. With the data portal, we aim to provide a one-stop-shop for anyone interested in working with indicators of tax havens and financial secrecy. We expect to launch the data portal for public use in early 2023.

Another significant area of data-intensive work was on estimating the scale of illicit financial flows (IFFs) and on identifying the actors responsible for these. We have been developing a bilateral gravity model of financial flows in which we are able to disentangle licit and illicit financial flows by including indicators of financial secrecy and tax havenry. This new approach allows to estimate the scale of IFFs across several different channels and across most countries of the world.

Lastly, we have been busy working with government authorities around the world on analysing microeconomic data (at the firm- or transaction-level) to identify Illicit Financial Flows in order to effectively design policies that mitigate these flows. For example, in Nigeria, we worked with the tax authority to identify companies that most likely engage in profit shifting, and we estimated the semi-elasticity of profits reported by multinationals in Nigeria. We are at various stages of work in several other countries, such as Ecuador, Uganda, and Ghana. We aim to strengthen this area of work further to bring the most possible impact of our work on actual reductions in the scale of IFFs and the resulting tax revenue losses.

The Tax Justice Network reaching people, Communications and media

The Tax Justice Network continued to bring tax justice issues to more people through our media and online work in 2022. Our research and commentary was featured in over 4,600 media and press articles in over 140 countries. Over 344,000 sessions occurred on the Tax Justice Network website in 2022 and our social media posts on Twitter, Facebook and Linkedin had a combined reach of over 1,024,298.

Our podcasts continue to go from strength to strength, each of them unique productions in five different languages, released each month and available for any radio station to broadcast in EnglishSpanishArabicFrench and Portuguese. They’re all available here {where you can also subscribe} and you can find them on most podcast apps. We hope to be adding an exciting new regional podcast to our output in 2023…

In 2022 the podcasts have covered many of the developments and tax justice advances mentioned above, along with their significance in each region. We leave you with our English language podcast the Taxcast’s take on the day global power shifted, which gives you a fly on the wall look at the historic UN meeting and vote marking the beginning of the end of the OECD’s sixty-year reign as the world’s leading rule maker on global tax, an encouraging way to end 2022 and look ahead to 2023:

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